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National Payment System in Myanmar

One of the main responsibilities of the Central Bank of Myanmar is to develop an efficient, fast, safe and reliable national payment system. In line with this purpose, the Central Bank of Myanmar has issued policies for payment system. In the area of Cash Payment system, the policies covered three principal aspects, including fulfilling public needs for currency, ensuring that bank notes are fit for circulation, and taking preventive and repressive measures against the circulation of counterfeit currency. In the area of non-cash payment system, the policies are focused on mitigating risks and improving efficiency of payment system. In general, payment system activities experienced an improvement in line with the increasing public needs for both cash and non-cash payment instruments.

The Central Bank of Myanmar has implemented to improve non-cash payment system by using educational channel to public, business, associations through banks and media etc.

Implementation of Banking Network and Auto Clearing System

Implementation of Banking Network to be efficient, fast, and safe for national payment has commenced in 2007 and basic infrastructure has been built up among Central Bank and commercial Banks.

The current manual clearing system prompts banks to carry out final settlement ( net settlement ) resulting in accumulated liquidity at the end of the day thus arising bank's debit/credit balance. Inorder to maintain a smooth payment system, the Central Bank of Myanmar has so far been responsible for covering prompt payment settlement and any lack of fund suffered by banks failing to settle their clearing by providing of intra - day credit facility but it could not be spare out the whole country. For those reasons, the Central Bank of Myanmar has being implemented to upgrade present manual clearing system to Auto Clearing System throughout Central Bank Clearing Center.

Within the Current Clearing System, inter-bank credit transfer process, has so far adopted a paper based system by using paper credit note. Realizing the lack of efficiency from the viewpoint of banks operation, the Central Bank of Myanmar will implement to transmit transaction data in an electronic format without having to send credit notes physically to the organizer.

Development of Payment Instruments

In order to reduce the currency in circulation within the country and difficulty encountered among the public by handling of big amount of currency, the Central Bank of Myanmar has launched a new payment instrument of certified cheque to be confident in payment transaction by public.

Legal Aspects of Payment System

The Central Bank of Myanmar Law, and Law & Regulation for Financial Institutions are legal basis for operation of payment system and anti-money laundering law as well.

The regulation is designed to safe , smooth and efficient payment settlement and fund transfer ( remittance transfer process) as well as to protect the interest of all parties involved in the transfer. Remittance services are subject to Central Bank Oversight.

Activities on Development of Payment System

The Central Bank of Myanmar has laid down the policies for developing an efficient, fast, safe and reliable national payment system as its main responsibility. In the area of cash payment system, the policies covered three principal aspects, including fulfilling public needs for currency, ensuring that bank notes are fit for circulation, and taking preventive and repressive measures against the circulation of counterfeit currency. In the area of non-cash payment system, the policies are focused on minimizing risks and improving efficiency of payment system.

The Central Bank of Myanmar has planned to upgrade the present manual clearing system to Auto Clearing System and to implement the Banking Network for Electronic Fund Transfer (EFT) and reporting system among the financial institutions since 2007.

The Central bank of Myanmar has launched an electronic data transfer and has implemented Banking Network for Electronic Fund Transfer (EFT) and reporting system among the financial institutions in 2011. In order to accelerate the momentum of payment system development in Myanmar, the Payment System Upgrading Committee was organized on October 12, 2010, so as to study and explore the efficient, appropriate and sustainable domestic and international payment systems, new means of payment instruments and to follow up the international best practice of the payment system.

In order to lessen the handling of currency notes, the Central Bank of Myanmar encourage to issue debit card and ATMs among the financial institutions. Later on these network will be linked to ASEAN payment gateway.

Myanmar Payment Union was organized by state owned and private banks in 2011. The purpose of MPU is to provide the ATM and POS switching services among the banks. There is a road map for card issuing and acquiring process. MPU cards have already been issued in September 14, 2012. As a result, all bank card holders can withdrawal and check their balance and remittance their fund at any ATM among the banks. MPU will be made the settlement process.